MYR Group Inc. Announces Second-Quarter And First-Half 2010 Results

Forward-Looking Statements

Various statements in this announcement, including those that express a belief, expectation, or intention, as well as those that are not statements of historical fact, are forward-looking statements.  The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenue, income, capital spending and investments.  Our forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "anticipate," "potential," "plan," "goal" or other words that convey the uncertainty of future events or outcomes.  The forward-looking statements in this announcement speak only as of the date of this announcement; we disclaim any obligation to update these statements (unless required by securities laws), and we caution you not to rely on them unduly.  We have based these forward-looking statements on our current expectations and assumptions about future events.  While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control.  These and other important factors, including those discussed under "Risk Factors" in our Annual Report on Form 10-K, and in other current or periodic reports which we file with the Securities and Exchange Commission, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements.

These risks, contingencies and uncertainties include, but are not limited to, significant variations in our operating results from quarter to quarter, the competitive and cyclical nature of our industry, our ability to realize and profit from our backlog, the implementation of the Energy Policy Act of 2005, the implementation of the American Recovery and Reinvestment Act, our ability to obtain new contracts and/or replace completed or cancelled contracts, our ability to obtain adequate bonding for our projects, our ability to hire and retain key personnel and subcontractors, limitations on our internal infrastructure, the downturn in the U.S. economy and credit markets and its impact on our customers and our sources of liquidity.

Financial tables follow…

MYR GROUP INC.
Unaudited Consolidated Balance Sheets
As of December 31, 2009 and June 30, 2010
( in thousands, except share and per share data)	December 31, 2009	June 30,  2010
ASSETS
Current assets:
Cash and cash equivalents	$ 37,576	$ 44,940
Accounts receivable, net of allowances of $1,114 and $1,142, respectively	100,652	92,130
Costs and estimated earnings in excess of billings on uncompleted contracts	30,740	29,812
Deferred income tax assets	10,186	10,186
Receivable for insurance claims in excess of deductibles	8,082	8,395
Refundable income taxes	3,036	2,127
Other current assets	3,308	2,446
Total current assets	193,580	190,036
Property and equipment, net of accumulated depreciation of $33,566 and $39,117,
respectively	88,032	88,359
Goodwill	46,599	46,599
Intangible assets, net of accumulated amortization of $1,553 and $1,720, respectively	11,539	11,372
Other assets	1,899	1,871
Total assets	$ 341,649	$ 338,237
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$ 39,880	$ 35,364
Billings in excess of costs and estimated earnings on uncompleted contracts	25,663	23,776
Accrued self insurance	33,100	34,071
Other current liabilities	22,122	16,554
Total current liabilities	120,765	109,765
Long-term debt, net of current maturities	30,000	30,000
Deferred income tax liabilities	15,870	15,870
Other liabilities	899	884
Total liabilities	167,534	156,519
Commitments and contingencies
Stockholders' equity:
Preferred stock—$0.01 par value per share; 4,000,000 authorized shares;
none issued and outstanding at December 31, 2009 and June 30, 2010	—	—
Common stock—$0.01 par value per share; 100,000,000 authorized shares;
19,807,421 and 19,963,959 shares issued and outstanding at December 31, 2009 and June 30, 2010, respectively	198	199
Additional paid-in capital	142,679	144,148
Retained earnings	31,238	37,371
Total stockholders' equity	174,115	181,718
Total liabilities and stockholders' equity	$ 341,649	$ 338,237

MYR GROUP INC.
Unaudited Consolidated Statements of Operations
Three and Six Months Ended June 30, 2009 and 2010
	Three months ended June 30,		Six months ended June 30,
(in thousands, except share and per share data)	2009	2010	2009	2010
Contract revenues	$ 162,923	$ 140,285	$ 295,858	$ 289,174
Contract costs	144,146	123,572	260,048	257,292
Gross profit	18,777	16,713	35,810	31,882
Selling, general and administrative expenses	11,361	11,048	23,335	21,612
Amortization of intangible assets	83	83	167	167
Gain on sale of property and equipment	(153)	(256)	(210)	(446)
Income from operations	7,486	5,838	12,518	10,549
Other income (expense)
Interest income	52	12	174	23
Interest expense	(219)	(208)	(441)	(411)
Other, net	(51)	(53)	(111)	(83)
Income before provision for income taxes	7,268	5,589	12,140	10,078
Income tax expense	2,953	2,236	4,942	3,945
Net income	$ 4,315	$ 3,353	$ 7,198	$ 6,133
Income per common share:
—Basic	$ 0.22	$ 0.17	$ 0.37	$ 0.31
—Diluted	$ 0.21	$ 0.16	$ 0.35	$ 0.30
Weighted average number of common shares and potential common shares outstanding:
—Basic	19,727,048	19,867,530	19,719,969	19,844,457
—Diluted	20,689,524	20,790,557	20,702,087	20,760,939

MYR GROUP INC.
Unaudited Consolidated Statements of Cash Flows
Three and Six Months Ended June 30, 2009 and 2010
	Three months ended June 30,		Six months ended June 30,
(in thousands)	2009	2010	2009	2010
Cash flows from operating activities:
Net income	$ 4,315	$ 3,353	$ 7,198	$ 6,133
Adjustments to reconcile net income to net cash flows provided by operating activities —
Depreciation and amortization of property and equipment	3,131	3,809	6,296	7,749
Amortization of intangible assets	83	83	167	167
Stock-based compensation expense	231	392	462	816
Excess tax benefit from stock-based awards	—	(132)	—	(148)
Gain on sale of property and equipment	(153)	(256)	(210)	(446)
Other non-cash items	21	21	42	42
Changes in operating assets and liabilities
Accounts receivable, net	(1,322)	(5,779)	6,894	8,522
Costs and estimated earnings in excess of billings on
uncompleted contracts	(4,220)	2,081	(2,159)	928
Receivable for insurance claims in excess of deductibles	24	57	66	(313)
Other assets	1,049	1,364	1,100	1,905
Accounts payable	13,953	4,059	8,560	(5,485)
Billings in excess of costs and estimated earnings on
uncompleted contracts	23	5,102	(7,347)	(1,887)
Accrued self insurance	1,261	676	786	971
Other liabilities	(1,230)	(2,060)	(5,277)	(5,551)
Net cash flows provided by operating activities	17,166	12,770	16,578	13,403
Cash flows from investing activities:
Proceeds from sale of property and equipment	162	281	287	471
Purchases of property and equipment	(7,515)	(5,750)	(15,036)	(7,132)
Net cash flows used in investing activities	(7,353)	(5,469)	(14,749)	(6,661)
Cash flows from financing activities:
Payments of capital lease obligations	(5)	(16)	(13)	(32)
Employee stock option transactions	134	403	134	506
Excess tax benefit from stock-based awards	—	132	—	148
Equity financing costs	(1)	—	(11)	—
Net cash flows provided by financing activities	128	519	110	622
Net increase in cash and cash equivalents	9,941	7,820	1,939	7,364
Cash and cash equivalents:
Beginning of period	34,074	37,120	42,076	37,576
End of period	$ 44,015	$ 44,940	$ 44,015	$ 44,940

MYR GROUP INC.
Unaudited Consolidated Selected Data, Net Income Per Share
And EBITDA Reconciliation
Three and Six Months Ended June 30, 2009 and 2010
	Three months ended June 30,		Six months ended June 30,
(in thousands, except share and per share data)	2009	2010	2009	2010
Summary Data:
Contract revenues	$ 162,923	$ 140,285	$ 295,858	$ 289,174
Gross profit	$ 18,777	$ 16,713	$ 35,810	$ 31,882
Income from operations	$ 7,486	$ 5,838	$ 12,518	$ 10,549
Net income	$ 4,315	$ 3,353	$ 7,198	$ 6,133
Income per common share (1):
- Basic	$ 0.22	$ 0.17	$ 0.37	$ 0.31
- Diluted	$ 0.21	$ 0.16	$ 0.35	$ 0.30
Weighted average number of common shares
and potential common shares outstanding (1):
- Basic	19,727,048	19,867,530	19,719,969	19,844,457
- Diluted	20,689,524	20,790,557	20,702,087	20,760,939
Reconciliation of Net Income to EBITDA:
Net income	$ 4,315	$ 3,353	$ 7,198	$ 6,133
Interest expense (income), net	167	196	267	388
Provision for income taxes	2,953	2,236	4,942	3,945
Depreciation and amortization	3,214	3,892	6,463	7,916
EBITDA (2)	$ 10,649	$ 9,677	$ 18,870	$ 18,382
(1) The Company calculates net income per common share in accordance with ASC 260, Earnings Per Share. Basic earnings per share are calculated by dividing net income by the weighted average number of shares outstanding for the reporting period. Diluted earnings per share are computed similarly, except that it reflects the potential dilutive impact that would occur if dilutive securities were exercised into common shares. Potential common shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive or included performance conditions that were not met.
(2) EBITDA is not recognized under GAAP and does not purport to be an alternative to net income as a measure of operating performance or to net cash flows provided by operating activities as a measure of liquidity.

CONTACT:  MYR Group Inc.
          Marco A. Martinez, Chief Financial Officer
          847-290-1891
          [e-mail]
         
          Dresner Corporate Services
          Philip Kranz
          312-780-7240
          [e-mail]

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